American Woodmark Q1 2025 Earnings Report

American Woodmark EPS Results

• Actual EPS: $1.89
• Consensus EPS: $2.37
• Beat/Miss: Missed by -$0.48
• One Year Ago EPS: $2.78

American Woodmark Revenue Results

• Actual Revenue: $459.10 million
• Expected Revenue: $475.37 million
• Beat/Miss: Missed by -$16.27 million
• YoY Revenue Growth: -7.90%

American Woodmark Announcement Details

• Quarter: Q1 2025
• Date: 8/27/2024
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 27, 2024
• Conference Call Time: 8:30AM ET

American Woodmark (NASDAQ:AMWD) is a leading manufacturer and distributor of kitchen cabinets and bathroom vanities in North America. The company designs, builds and ships cabinetry products for a broad range of residential customers, including new-home builders, professional remodelers and specialty dealers. Its portfolio encompasses framed and frameless cabinet lines, along with accessory products such as mouldings, panels and hardware components. American Woodmark’s products are sold under the American Woodmark and Waypoint Living Spaces brands through a diversified network of home centers, independent dealers and direct-to-builder channels.

Headquartered in Winchester, Virginia, American Woodmark was founded in 1980 and has grown through a combination of organic expansion and strategic acquisitions. The company operates multiple manufacturing facilities across the United States, including plants in Virginia, North Carolina, Ohio, Tennessee and Texas. This geography-focused footprint allows it to optimize logistics, maintain tight quality control and respond quickly to customer requirements in key regional markets.

American Woodmark’s business is organized to serve three core end markets: new residential construction, professional remodeling and repair and improvement channels. Within these segments, the company emphasizes product innovation, supply chain integration and lean manufacturing principles to drive efficiency and cost competitiveness. It offers a range of custom and semi-custom options, enabling clients to tailor cabinet designs by style, finish and configuration.

Under the leadership of President and Chief Executive Officer Curtis A. Renfroe, American Woodmark continues to invest in advanced manufacturing technology, digital order management systems and customer service initiatives. The company’s strategic priorities include expanding its manufacturing capacity to meet evolving housing trends, enhancing its product mix and strengthening partnerships with large homebuilders and retail customers throughout North America.

American Woodmark Q1 2025 Earnings Call Transcript

Key Takeaways

• American Woodmark reported Q1 net sales of $459.1 million, down 7.9% year-over-year, citing weaker remodel demand and slowing housing starts.
• Adjusted EBITDA fell to $62.9 million (13.7% margin) and EPS to $1.89, impacted by lower volumes and an unfavorable $4.7 million FX hedging adjustment.
• For fiscal 2025, the company now expects net sales to decline low single digits and adjusted EBITDA of $225–245 million amid subdued repair & remodel and new construction trends.
• Liquidity remains strong with $89.3 million in cash, 1.19× leverage, and the repurchase of 271,000 shares (~$24 million) with $65.4 million of authorization still available.
• Strategic initiatives progressed with capacity ramps in Mexico and North Carolina, ERP and automation planning, and new stock kitchen & bath contract wins that position the company for a demand rebound as rates ease.

Presentation

[Operator]

Good day, and welcome to the American Woodmark Corporation first fiscal quarter 2025 conference call. Today's call is being recorded August 27th of 2024. During this call, the company may discuss certain non-GAAP financial measures, including in our earnings release, such as adjusted net income, adjusted EBITDA, adjusted EBITDA margin, free cash flow, net leverage, and adjusted EPS per diluted share. The earnings release, which can be found on our website, americanwoodmark.com, includes definitions of each of these non-GAAP financial measures, the company's rationale for the usage and reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. We also use our website to publish other information that may be important to investors, such as investor presentations. We will begin the call by reading the company's safe harbor statement under the Private Securities Litigation Reform Act of 1995.

[Operator]

All forward-looking statements that may be made by the company involve material risk and uncertainties and/or are subject to change based on factors that may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in such forward-looking statements. Such factors include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission and the annual report to shareholders. The company does not undertake to publicly update or revise its forward-looking statements, even if experience or future changes may make it clear that the projected results expressed or implied therein will not be realized. I would now like to turn the call over to Mr. Paul Joachimczyk, Senior Vice President and Chief Financial Officer. Please go ahead, sir.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Good morning, and welcome to American Woodmark's first fiscal quarter conference call. Thank you for taking the time today to participate. Joining me is Scott Culbreth, President and CEO. Scott will begin with a review of the quarter, and I'll add additional details regarding our financial performance. After our comments, we'll be happy to answer your questions. Scott?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Thank you, Paul, and thanks to everyone for joining us today for our first fiscal quarter earnings call. Our teams delivered net sales of $459.1 million, representing a decline of 7.9% versus the prior year. This was below our expectations provided during last quarter's call, due to weaker demand during the summer in the remodel channel. Year-over-year growth in single-family housing starts have slowed over the past three months, putting downward pressure on cabinet installations in future quarters. The focus remains on future rate cuts from the Fed, which could drive stronger demand in calendar 2025. Our home center customers have noted higher interest rates and macroeconomic pressures leading to weaker spending on projects. This has been more significant for higher-priced discretionary projects like kitchen and bath.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

We are not experiencing a loss of share with our customers, but we do expect weaker demand versus our expectations at the start of the fiscal year. Our teams remain focused on growing share at our accounts and have realized recent awards in our stock, kitchen, and bath business that will benefit the remainder of the fiscal year. Our belief is that as interest rates decline, consumer confidence increases, existing home sales increase, and the potential for home projects increases. This should serve as a tailwind for our business in calendar year 2025. Our adjusted EBITDA results were $62.9 million, or 13.7% for the quarter. Reported EPS was $1.89. Operational excellence efforts continue to drive progress across the enterprise, but were offset in the quarter by lower volumes.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Our cash balance was $89.3 million at the end of the first fiscal quarter, and the company has access to an additional $322.9 million under its revolving credit facility. Leverage was at 1.19x adjusted EBITDA, and the company repurchased 271,000 shares in the quarter. Our outlook for the industry in fiscal year 2025 assumes the repair and remodel market will be down mid-single digits and new construction to be at mid-single digits. Within R&R, larger discretionary projects will trend worse than the overall market and are projected to be down high single digits. As a result of the softer R&R demand and the recently reported slowdown in new construction single-family housing starts, our expectation for the company's net sales is being adjusted to a low single-digit decrease versus fiscal year 2024.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Adjusted EBITDA expectations are targeted in the range of $225 million-$245 million. Our teams continue to execute our strategy that has three main pillars: growth, digital transformation, and platform design, with a number of key accomplishments over the past quarter. Our summer launch has been well received in the market, and conversion activity continues within our distribution business in 1951, and a number of new accounts are being pursued. As previously noted, our teams have won several stock bath and kitchen opportunities over the past quarter. Digital transformation efforts continue with our teams planning for ERP go live in our West Coast made-to-stock facility later this fiscal year. Platform design work continues as we ramp our Monterrey, Mexico, and Hamlet, North Carolina, facilities. Mill equipment continues to be installed at both sites and will ramp over the coming months.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Automation efforts are progressing in our mill, component, and assembly operations. In closing, I'm proud of what this team accomplished in the first fiscal quarter and look forward to their continuing contributions during fiscal year 2025. I'm now going to turn the call back over to Paul for additional details on the financial results for the quarter.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Thank you, Scott. I'll begin by discussing our first quarter results and then provide our outlook for the rest of the fiscal year. Net sales were $459.1 million, representing a decrease of $39.1 million, or 7.9% versus the prior year. We saw a softening in large ticket items that primarily impacted our remodel business. We still believe in the long-term fundamentals of the housing industry, and they are being impacted currently by consumer confidence and higher interest rates. Gross profit as a percent of net sales for the first quarter decreased 180 basis points to 20.2% versus 22.0% reported last year.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Lower sales volumes impacted our manufacturing leverage in our new facilities, with combined price increases in our input costs around logistics, raw materials, and labor, but those impacts are partially offset by our sustained operating efficiency efforts. Operating expenses, excluding any restructuring charges, were 10% of net sales versus 12% last year. The 200 basis point decrease is due to the roll-off of our acquisition-related intangible asset amortization that ended in December 2023. Lower incentive compensation and controlled spending across all functions, offset by our lower sales. Adjusted net income was $29.6 million, or $1.89 per diluted share in the first quarter, versus $46.2 million, or $2.78 per diluted share last year.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

This was impacted by an unfavorable mark-to-market adjustment on our foreign currency hedging instruments of $4.7 million net of tax. adjusted EBITDA was $62.9 million, or 13.7% of net sales, versus $75.2 million or 15.1% of net sales last year, representing a 140 basis point decline year over year. Free cash flow totaled a positive $29.4 million for the current fiscal year-to-date, compared to $72.5 million in the prior year. The $43.1 million decrease was primarily due to changes in our operating cash flows, specifically higher inventory. Net leverage was 1.19x adjusted EBITDA at the end of the first quarter, compared with 1.09x last year.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

As of July 31, 2024, the company had $89.3 million in cash, plus access to $322.9 million of additional availability under its revolving facility. Under the current share repurchase program, the company purchased $24 million, or 171,000 shares in the first quarter, representing about a 1.8% of outstanding shares being retired. We have $65.4 million of share purchase authorization remaining. Our outlook for fiscal year 2025: Net sales are expected to be down low single digits versus fiscal year 2024. This is a result of the softer repair and remodel market and a decline in larger-ticket remodel purchases across the retailers, partially offset by the continued growth in new construction during the back half of the year.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

However, these assumptions are highly dependent upon overall industry, economic growth trends, material constraints, labor impacts, interest rates, and consumer behaviors. Our projected EBITDA margin for the fiscal year 2025 is being targeted in a range of $225 million-$245 million, driven primarily by sales volumes retracting and the increased manufacturing deleverage of our facilities during the last nine months of the fiscal year. We will continue to optimize our manufacturing and service platforms. In addition, we evaluate our pricing monthly and will continue to do so on a go-forward basis to mitigate the inflationary impacts on logistics, raw materials, and labor. Our capital allocation priorities for fiscal year 2025 remain unchanged.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

We will first be focused on investing back in the business by continuing our path for our digital transformation with investments in ERP and CRM and investing in automation. Next, we'll be opportunistic in our share repurchasing, and lastly, with our debt position at a leverage ratio we want to achieve, debt repayments will be deprioritized. In conclusion, our team is dedicated to making it happen every day. Our operational improvements that have been put in place over the past year have helped us mitigate the volume declines affecting the broader repair and remodel industries. Investments in automation will drive future operational efficiencies and enable our long-term targets from both a growth and margin perspective. We remain steadfast in our GDP strategy and confident in the long-term investment opportunities within the housing market, including both new construction and the repair and remodel sectors. This concludes our prepared remarks.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

We'll be happy to answer any questions you have at this time.

[Operator]

We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Adam Baumgarten with Zelman & Associates. Please go ahead.

[Adam Baumgarten, Analyst at Zelman]

Hey, good morning, guys. Just on first quarter, could you maybe give some color on how revenue trended by channel, in the fiscal first quarter?

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Yeah. For new construction, we were up single digits, and for repair and remodel, down double digits.

[Adam Baumgarten, Analyst at Zelman]

Okay, got it. And then just thinking about the updated outlook for the year, it looks like it assumes flat year-over-year revenue over the balance of fiscal 2025. Maybe help us think about how you expect that to trend over the next three quarters. Should we expect some pressure, you know, in the coming quarter and then maybe a bit of growth in the back half of the fiscal year? Maybe just a bit more color on how you expect it to phase.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Yeah, Adam, we don't want to get into a quarterly forecast and projection outlook. We'd rather provide just the full year basis. There's still a lot of uncertainty as to what will play out over the next couple of quarters with the rate cuts, but we feel confident in the full-year projection that we provided.

[Adam Baumgarten, Analyst at Zelman]

Okay. And then just lastly, on the input costs, I mean, sounds like there's some pressure there, and you guys are considering pricing. Maybe just an update on how the pricing typically works. I know it's different by channel, and how much would potentially be needed if the input costs stay elevated here?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Sure. And you're right, the pricing actions will be variable depending on the channel. The timing could move around based on when we also had our last increase in a respective channel. Historically, what you would typically see is first actions in dealer distributor, followed by new construction, followed by home center, just because of the lag time on getting those prices input into the process. I can tell you at this particular point in time, we have been active in dealer, and we have announced a price increase in that channel.

[Adam Baumgarten, Analyst at Zelman]

Okay, got it. Thanks. Best of luck.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Thank you.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Thanks, Adam.

[Operator]

The next question will come from Garik Shmois with Loop Capital. Please go ahead.

[Garik Shmois, Managing Director at Loop Capital]

Oh, hi, thanks. Just on the new construction side, if I remember correctly, it sounds like you held your outlook, but you also talked to some of the weaker trends, just given the housing start environment that slowed over the last ninety days. So I'm just curious as to what's underpinning some of the new construction view for you. Is it, you know, share gains? Is it some interest rate assumptions you're making, for the back half of the year? Just any color on new construction would be great.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Sure. On new construction, I would tell you that out of the gate for our first fiscal quarter, we exceeded what our original planning expectations were from a demand standpoint, and feel pretty good about our second quarter. Our concern became the second half as we saw starts to decline over these last ninety days. So we start to model that forward as to when cabinet installation will occur, and our expectations, we'll see a little bit softer cabinet install in the back half. To your comment on interest rates, let's assume the Fed takes action in September. Feels like that's almost a guarantee at this particular point in time. I don't think one move makes a big change because everyone's expecting it.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

But as subsequent moves start to take place, we think that will unlock more homeowners interested in buying a new home, or also in the repair and remodel side, investing in their home and doing a project in the kitchen or bath area. So we think that could drive incremental demand in new construction, but that starts to play out into, you know, mid-calendar year 2025, which starts to cross into our next fiscal year.

[Garik Shmois, Managing Director at Loop Capital]

Okay. Is that comment pretty consistent with remodel as well, that, you know, your view would be that we need to see several rate cuts before, you know, that end market starts to accelerate as well?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah, absolutely. I think it's going to take a couple reductions, and then there's going to be a lag effect before, you know, consumers get confident and then start to engage in a project, and the planning horizon as well as the actual project timelines, you know, pretty significant on a kitchen remodel. So I also don't think that's a huge boost for us in our second half, but it starts to set us up for a nice 2026.

[Garik Shmois, Managing Director at Loop Capital]

Okay. And then just lastly, if my math was right, it looks like you held your EBITDA margin guidance despite the slower sales. So, you know, I was wondering if you can go into any more detail as to some of the offsets and some of the benefits you're seeing on the margin side.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah, the first would be the comment earlier around some pricing actions as necessary. So as we already mentioned, we've taken some actions in dealer. If input costs continue to move in the other channels, we'll certainly be looking at conversations in those as well. So we'll continue to manage that. And then just overall operating efficiencies. Our teams are focused on operational excellence, not just in the manufacturing side, but our service platform and new construction, managing SG&A spending wisely. We'll continue to do that, despite the pullback in demand, and, you know, our goal is to manage that EBITDA number to the range that we just provided.

[Garik Shmois, Managing Director at Loop Capital]

Understood. All right, thanks for all that.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Okay, thank you.

[Operator]

The next question will come from Trevor Allinson with Wolfe Research. Please go ahead.

[Trevor Allinson, Director at Wolfe Research]

Hi, good morning. Thank you for taking my questions. First, you all mentioned some awards in stock, kitchen, and bath that's going to benefit you guys. Can you provide some color on those? Perhaps how large of a benefit they could be? Is there any load in, and what the timing looks like on those?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah, I don't want to get into the specifics around load in and maybe exact timing, but I'll just share with you that it's in our full-year outlook that we just provided. It's some permanent placement on the kitchen side, and then on the bath side, it's more of a promotional nature. So, you know, roughly $30 million from a net standpoint and business annualized and starting to, you know, shift in the current quarter.

[Trevor Allinson, Director at Wolfe Research]

Okay, got you. That's very helpful. And then wanted to follow up again on input cost trends. You've mentioned a few pieces of that that's a bit inflationary. You've got some pricing going into the market. What are you guys assuming for input cost inflation embedded in your full-year EBITDA guidance?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah, we've seen some impacts in lumber as well as particle board, more so recently on the particle board side. But labor is just going to always be an ongoing input cost increase as we push forward to the final mile. So, you know, we've got a good handle on what those have been trending. We've got those modeled in our outlook, and then, you know, we've built in pricing as appropriate to be able to offset and mitigate to hit the EBITDA numbers.

[Trevor Allinson, Director at Wolfe Research]

Okay, great. And then one more quick one, if I could. You guys previously had mentioned potentially being more aggressive with the new capacity you have available to win some share there. Can you provide more color on that? Is that more aggressive on pricing? Is that more marketing dollars? How, how exactly are you thinking about that?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Not more aggressive on pricing and marketing dollars, but more aggressive in sharing our capability. You know, making sure the market understands and our customers understand the capacity we've got and our ability to serve that demand. So that's the focus and the energy. As a reminder, you know, when we went through COVID and we saw such a large surge in demand, we really had difficulty keeping up with that. And we had issues around, you know, employment, etc. That was a barrier. So we invested, despite, you know, a recent market downturn, we invested in capacity. We wanted to make sure we were ready to take advantage of demand when it comes back. So we've made that investment, and we're ramping that investment up.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

So instead of our teams having to pull back on being aggressive in the marketplace on taking share, now we can turn them loose. So we've done that, and we've had some success up to this point.

[Trevor Allinson, Director at Wolfe Research]

Makes a lot of sense. All right. Thank you very much. Good luck moving forward.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Okay, thank you.

[Operator]

Again, if you have a question, please press star, then one. Our next question will come from Tim Wojs with Baird. Please go ahead, sir.

[Timothy Wojs, Analyst at Baird]

Hey, guys. Good morning.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Hey, good morning, Tim.

[Timothy Wojs, Analyst at Baird]

Maybe just first question, Scott. I mean, as you've talked to, like, your channel partners and your dealers, you know, just on the R&R environment, do you feel or do you get the feedback that this is just an interest rate situation at this point, that there is, you know, some level of kind of deferred demand that's out there that's just kind of waiting for lower interest rates? Or is there something else? I'm just trying to understand if, like, there is a, you know, a pocket of, you know, kind of projects that are out there that are just waiting for financing, you know, to come down to kind of stimulate demand.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

The feedback we're getting is there's not a structural reduction in demand. It really is consumers just kind of holding back and waiting on the sideline. They want to see what's going to play out with rates, to some extent, the election as well, and get on the other side of that and as consumer confidence comes back, obviously, folks are going to want to look to invest in their home. We've seen the price appreciation, we've seen the value creation that folks have had in holding that asset. They're staying in them longer, and that's going to create an opportunity to invest, so we don't think there's a structural reduction in demand. We think it's there.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

In fact, our board meeting last week, one of the analogies used, Tim, was a beach ball being held under water, and we used it to describe the demand environment, perhaps for both new construction and remodel. And these macroeconomic factors are keeping it under water. Eventually, those will dissipate, and that'll come back, and we just want to make sure that we're ready for that from a capacity and from a people standpoint and operating efficiency standpoint.

[Timothy Wojs, Analyst at Baird]

Okay. Okay. And then I guess when you think about, you know, just kind of the expectations for share gains kind of this fiscal year, how has that tracked relative to kind of your initial expectations? I know you secured some wins, but I'm just kind of curious if there's the opportunity to exceed that or if things are kind of tracking as you expected.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

I'd say at this point in time, Tim, our teams are tracking as we expect. We expected to have some wins, and we've delivered on those up to this particular point in time.

[Timothy Wojs, Analyst at Baird]

Okay. Okay, great. And then I guess the last thing, just on capital deployment, I mean, you guys have repurchased probably close to 10% of your stock over the past five quarters. I mean, anything that would kind of change that trajectory, especially when you kind of look at some of those, you know, longer-term targets that you have out there?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah. No, Tim, we remain very confident in the share repurchase program and efforts for our organization.

[Timothy Wojs, Analyst at Baird]

Okay.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah, nothing, nothing near term that would change that, Tim.

[Timothy Wojs, Analyst at Baird]

Okay. Sounds good. Good luck on the rest of you guys.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah. Thank you.

[Operator]

Thank you. Again, if you have a question, please press star then one. Our next question will come from Kathryn Thompson with Thompson Research Group. Please go ahead.

[Kathryn Thompson, Founding Partner and CEO at Thompson Research Group]

Hi, thank you for taking my questions today. Great analogy on the beach ball from earlier in the call. Wanted to follow up on that pent-up demand, because with our universe coverage, what we're finding is the kind of balance between outdoor projects providing a greater return for homeowners, particularly in the wake of COVID, versus kind of your traditional kitchen and bath. And so there's some stats that some companies have bandied about that, but based on your experience and based on what you're seeing in the market, have you seen any change in terms of the return metrics for a kitchen remodel versus the outdoor, which has been so prevalent since COVID? Thank you.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Yeah, thanks for the question, Kathryn. I haven't seen anything that's pointed to a change in the return philosophy or approach for investing in the home, as to how that may compare with an outdoor project. I guess I have a mental model. I don't necessarily have facts in front of me, but I still think a large-scale kitchen project is going to be more costly than an outdoor project, in general. But the return metrics continue to be there for us. So, you know, the price points between the two can certainly influence and impact the demand trajectory, but I still think folks are passionate about that indoor space. Folks are passionate about hosting.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

To your point, some of that's moved outdoors, but the indoors is still going to be relevant, and we think folks are going to continue to want to beautify those spaces.

[Kathryn Thompson, Founding Partner and CEO at Thompson Research Group]

Okay, great. And then, in terms of share gains, what is the typical lifetime to win the financial benefit? You know, just in other words, you know, what historically has been the effect on your financials?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

So it would depend on the type of share gain win. So typically, you know, a new construction, it's going to be a longer lag. You're going to be awarded the business, say, for a particular community, and that community is going to have to be developed. So is the dirt already ready or are they starting to build, et cetera? So it could be short to long, depending on that specific project. If you're converting an existing community, that could be a little bit faster because you just simply need to change out the model home, and then you could presumably start selling as the next customers come in and start making selections. In home centers, it's, you know, essentially the, you know, the shelf positions of kitchen or bath.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Again, it's going to depend a bit on what their timeline is, when can they bring their store labor in to do a reset and a change-out? So it could be upwards of a couple of quarters before you fully realize all the benefit associated with some choices and decisions that you're realizing.

[Kathryn Thompson, Founding Partner and CEO at Thompson Research Group]

Okay, finally, any color on the M&A market?

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Nothing specific to add there. I know we had a question around that last quarter. There had been some activity. We shared our commentary at that particular point in time. Nothing that we're currently pursuing or looking at this point in time.

[Kathryn Thompson, Founding Partner and CEO at Thompson Research Group]

Okay, great. Thanks very much.

[Scott Culbreth, President and CEO at American Woodmark Corporation]

Okay, thank you.

[Operator]

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Paul Joachimczyk for any closing remarks. Please go ahead, sir.

[Paul Joachimczyk, SVP and CFO at American Woodmark Corporation]

Since there are no additional questions, this concludes our call. Thank you all for taking the time to participate.

[Operator]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Paul Joachimczyk, SVP and CFO
• Scott Culbreth, President and CEO

Analysts

• Garik Shmois, Managing Director at Loop Capital
• Trevor Allinson, Director at Wolfe Research
• Timothy Wojs, Analyst at Baird
• Adam Baumgarten, Analyst at Zelman
• Kathryn Thompson, Founding Partner and CEO at Thompson Research Group